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Insurance regulators fret over a spike in auto glass claims

The Office of Insurance Regulation is taking on assignment of benefits abuse in the 2018 legislative session. Pictured is Florida Insurance Commissioner David Altmaier. | [Times file photo]
Published Aug. 22, 2017

TALLAHASSEE — Three months ago, state regulators weren't tracking a surge in broken auto glass claims, particularly in Tampa Bay.

The issue has their attention now.

"There's a lot more (assignment of benefits)-related litigation in the windshield space than in the property space," Florida Insurance Commissioner David Altmaier said during a state Cabinet meeting last week.

Abuse of what's known as "assignment of benefits" has ramped up in recent years. The issue occurs when a policyholder gives a third party — such as an auto glass company — permission to deal directly with their insurance company following a claim. If the insurance company refuses to pay what the company charges for a repair, the glass company often sues (in the consumer's name) for the remaining balance and attorneys fees, driving up the overall cost of the claim and later, consumers' rates.

As the Tampa Bay Times noted in a May report, lawsuits by auto glass companies against insurance companies skyrocketed from 1,389 in 2012 to 19,695 in 2016. Tampa Bay accounts for a little over half of those cases.

Previous coverage: Tampa Bay is ground-zero for assignment of benefits cases over broken auto glass

When asked about the jump in claims at the time, OIR said it did not track auto glass claims specifically. The agency instead only tracked the more expensive iteration of assignment of benefits abuse — property damage.

During the upcoming 2018 legislative session, Altmaier said, assignment of benefits abuse will be the agency's priority — including auto glass.

"The solution, we believe, to the windshield issue is the same as the solution to the property issue," Altmaier said. A bill that did not pass the 2017 session would have reformed the automatically-awarded attorney fees that come with a judgment in favor of companies acting on behalf of consumers.

The difference between abuse in auto and home cases is price.

"It's not hitting the pocketbooks of consumers quite like the property issue is," Altmaier said.

But auto insurance policyholders could pay the price in higher premiums down the road — especially as areas outside Tampa Bay report a similar jump in claims.

"I would anticipate that it will begin to spread," Altmaier said. "And in fact, we're already starting to see it begin to spread throughout the state (though) not nearly to the same volume as Tampa."

Contact Malena Carollo at mcarollo@tampabay.com or (727) 892-2249. Follow @malenacarollo on Twitter.

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